Investigation into crypto OTC fraud in Bengaluru, ED seizes 8,700 USDT

Traders Union
All News
Financial News
Bengaluru crypto OTC investigation

Highlights

ED conducted raids on 18.07.2026 and 19.07.2026 in Bengaluru under the crypto OTC fraud case and seized 8,700 USDT.
According to evidence found during the search, the size of the alleged scam could be around 35 million USD, while the FIR mentioned 10 million USD.
The investigation revealed that the accused lured investments by promising discounted token allocations via Telegram and other social platforms, but did not fulfill the promises.

This article was translated from the original. Read the original version by our correspondent here.

Alleged Modus Operandi Revealed in Search

According to the Enforcement Directorate, the Bengaluru Zonal Office has initiated an investigation under the Prevention of Money Laundering Act, 2002. This action is based on an FIR registered at the Cyber Crime Police Station of South Andaman on the complaint of a Dutch entity, alleging large-scale fraud in OTC deals of virtual digital assets.

The agency states that the accused promised investors discounted allocations in tokens such as MultiverseX, Kava, BEAM, GRASS, SUI, VANA, and AGLD, but the supply was not fulfilled. According to the allegations, Mohammad Wasim, Saurabh Diwan, and Vaibhav Gupta built trust through private Telegram groups, face-to-face meetings, and allegedly fake introductions, then attracted large investments by smoothly completing initial small deals.

The investigation also revealed that after market conditions improved, the delivery of tokens was allegedly stopped. According to the ED, the funds collected from investors were routed through crypto wallets to Ravindra, based in Bengaluru, who the agency claims is the alleged mastermind of the OTC deals.

The agency conducted searches at multiple locations on 18.07.2026 and 19.07.2026. The searches yielded digital devices, emails, incriminating evidence linked to wallets allegedly used to launder the proceeds of crime, and virtual digital assets equivalent to 8,700 USDT were also seized.

Scale of the Case and Industry Impact

According to the ED, the searches indicate that the value of the alleged scam could be around 35 million USD, which is significantly higher than the approximately 10 million USD mentioned in the FIR. The agency also stated that during the investigation, it was found that several foreign entities and investors were similarly defrauded, although they have not yet filed criminal complaints.

The investigating agency highlighted a pattern in the alleged modus operandi where self-styled crypto influencers promote private placements and initial token offerings via Telegram, WhatsApp, Instagram, and websites. They claim discounted allocations from blockchain developers to raise investments, then allegedly divert the funds to personal expenses, businesses, or movable and immovable assets without delivering the promised tokens or returns.

This case raises new questions about informal OTC networks, cross-border investor risks, and compliance monitoring in India's virtual digital asset sector. The Enforcement Directorate has stated that further investigation is ongoing.

Our previous report detailed the ED's action against the “Digital Arrest” cyber-fraud network under the Panaji Zonal Office in Goa, where after defrauding a senior citizen of crores of rupees, the funds were layered through mule accounts, shell/conduit companies, and forex channels. Cash, foreign currency, and gold-jewelry were seized in the search, several bank accounts were frozen, and the investigation was said to be progressing based on digital evidence.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.